Blind

A person is considered legally blind for purposes of qualifying for a larger standard deduction if:

He or she is totally blind.

He or she can’t see above 20/200 in the better eye with glasses or contact lenses.

His or her field of vision is 20 degrees or less. Bond premium The amount over face value that you pay to buy a bond paying higher than current market rates. With taxable bonds, a portion of the premium can be deducted each year that you own the securities. Burden of proof The responsibility of the taxpayer to prove that his or her tax return is accurate, rather than the IRS having to provide convincing evidence that it is inaccurate. Although Congress has shifted the burden of proof to the IRS in certain tax disputes, don’t throw away your records. The change will have no effect on the vast majority of taxpayers. The burden shifts only if a case gets to court—which happens very rarely—and then only if the taxpayer has complied with all record-keeping requirements and has cooperated with IRS requests for information. In almost all cases, the burden of proof remains on your shoulders. C Cancelled debt Generally, when a debt is cancelled or forgiven, the borrower who benefits is considered to have received taxable income equal to the amount of the cancelled debt. There are exceptions. For example, some student loans contain agreements that debt will be forgiven if the borrower works for a certain period of time in a certain profession. And, up to $2 million of debt forgiven on a mortgage on a principal residence – in a foreclosure, for example, or short sale — can also be tax- free. Also, forgiven debt is not taxable to the extent the borrower is insolvent (that is, whose liabilities exceed his or her assets) or when the debt is waived by a bankruptcy court. Other provisions grant tax-free treatment for cancelled debts in specific circumstances. Capital expenditure The cost of a permanent improvement to property. Such expenses, such as adding central air conditioning or an addition to your home, increase the property’s adjusted tax basis.